PARISH STRUCTURES Identity, Integrity, and Indissolubility

Mark E. Chopko PARISH STRUCTURES Identity, Integrity, and Indissolubility

Protecting the p-operty of Catholic what church and whether the CYO basketball teams parishes and defining its ownership in civil were any good. Often parishes were picked by acci- law requires careful positive action and dent-where one lived and grew up dictated what cannot be taken for granted. church one attended. Catholics now give attention to choosing their parishes based on the availability of schools and other programs, a style of music and litur- . gy, cultural values, or other factors.Having put so much ore than just a place to go on Sundays, effort into these choices, Catholics sometimes regard parishes are a source of community and them possessively.Thus, when in the last severalyears M identity for millions of Catholicsin the Unit- some have perceived that their parishes were under as- ed States. When I introduced two of my friends to each sault, ripples of concern swept through Catholic parish other, they discovered themselves to have similar South communities. Side Chicagoroots. Their neighborhoods and points of At the outset let me state that there is no movement reference were not streets or parks but parishes. Re- to target parish assets for seizure in the course of church membrances were triggered based on who attended litigation. Nonetheless, it is true that liability claims and creditors have threatened to reach patrimony, that is, the real estate and cash present in parishes. In some Mark E. Chopko is currently a partner and chair of the ways, nineteenth-century structureshave collided with Nonprofit and Religious Organizations Practice Group in twenty-first-centuryliabilities,and the results are not al- the Washington, D.C., ofice of Stradley Ronon Stevens G. ways gratifying. Young, LLP. From 1987 until 2007 he was general counsel It is not that church administrators have been inat- of the U.S. Conference of Catholic Bishops. The views ex- tentive, but rather that they have been complacent.One pressed in this article are his alone and not necessarily those assumed that the operating presumptions made for of the USCCB, Stradley Ronon, or any other entity. He notes parishes at the time they were created would continue that he is not a canon lawyer. to be part of the culture. Similarly, structural choices I I Summer 2009 CHURCH5 casionally outlawed and thereforefor- bidden to own property. One solution, adopted by Maryland Jesuitsand later adapted by Catholicsin other colonies, was to place land and other property in the hands of reliablelay trusteeswho would hold the property in fee simple (that is, in a person's own name), but with the recog- nition that the property was indeed held in trust for were obvious to those who made them, and they did not the local church. conceive they would need to be explained to succes- Even after the Revolution,many of the models adopt- sive generations of litigants, judges, and regulators. ed by the new states by which religious organizations But, even if we were not prodded by the liability situ- were allowed to own property reflected a Protestant ation facing catholic dioceses in the United States, it is polity. Those corporate forms that did exist provided for clear that we need to give additional attention to the governance entirely by lay people; no clergy were per- structure and operation of parishes. Some of the oper- mitted to serve on any church board. These civil forms ating assumptions on which parish structures were de- and agencies allowed under the law did not acknowl- signed need to be 'rethought and brought into edge differences in ecclesiastical law or custom, but conformity with the.realitiesof modern life and some- rather promoted a uniform property tenure system sub- times even the new (1983) Code of Canon Law. ject to the law of the state. Since all were to be treated This article will chart briefly some of the history of equally, a basic premise of the American experience, how we have'arrived at the current situation, offer a no distinctions, exceptions, or special treatment were brief reflection on certain theological and ecclesiastical allowed for different churches. The assumption at the operating assumptions, and make other observations time was that American institutions reflected a form of about the possible coming structural revolution for homogeneous Protestantism, and one form really was parishes. all that was needed. Catholic bishops and pastors tried to cope with Some tiistory these disabilities as best they could through a variety In the territory now called the United States of Amer- of devices, including the reliable lay "trustee" and ica, local parish churches existed before there were na- holding title to real property in the name of the bish- tive bishops and dioceses. Throughout its colonial op (again with the understanding that such property history, American Catholics labored under significant really was in trust for the church). I have already al- legal disabilities. The church faced many of the same luded to the problem of reliability among trustees. But problems here that it faced in England. Even when the property placed in the bishop's name precipitated a church was not banned outright, it went through var- new problem: On a few occasions, the biological heirs ious periods when its ability to hold propertywas under of the bishop claimed that the real estate titled in his severe restriction. For example, even in Maryland, name at the time of his death should pass to them and founded by the Catholic Calverts, the church was oc- not to his successor.

6 CHURCHSummer 2009 Corporation Sole A major breakthrough in the mode and tenure I of Catholic church property occurred in 1833. In that year, the first statutory corporation sole was created by the Maryland legislature for the Archbishop of Baltimore. It was con- sidered an improvement after 60 years of abuses in the administration of church property in various forms. It allowed the church to end the fee simple ownership of fault lay not with the civil law but with the church's real estate by bishops (which had been gaining ground administrators. As Bishop England noted, under Amer- since the First Provincial Council of Baltimore as a so- ican law, Catholics "can, without departing from lution to unreliable lay trustees) and provided a civil [church] doctrine or discipline, regulate the manner in legal method for episcopal supervision of church prop- which the property is to be held, and how it is to be erty. In 1837, through the Third Provincial Council of managed, and can establish rules to restrict and to di- Baltimore, the bishops decreed that dioceses should rect its managers.. ." use devices provided in the civil law to protect the in- tentions of donors givingaeal and other property to the How We Arrived church. Likewise, the coukcil instructed that such prop- The idea that the structures for Catholic parishes need- erty also should not be.titled in the bishop's name. Prop- ed to be periodically reviewed and adjusted according erty in the corpora60n sole recognized that this was to conditions is not a new idea. The roots of the cur- ecclesiastical property, subject to the law of the church rent discussion are in the 1956 deadly fire at the St. Rose and of the state, that it was separate and apart from the of Lima Oyster Roast in the Archdiocese of Baltimore. bishop's personal estate, and that there was no need During that event, the wooden structure in which the for devices or craft to reach the desired end. function was being held caught fire, and several of the One critical commentator on the American eccle- parishioners were trapped in the flames. Prescient risk sial legal scene at that time, Bishop John England of managers recognized that the potential reach of liabil- Charleston, S.C., criticized some of the administrative ity claims could extend beyond St. Rose of Lima to choices being made in the United States for the opera- other parishes and to the archdiocese, since all were tion of Catholic entities. In his words, Catholic entities organized as one corporation sole. By 1963, Baltimore were among those institutions most negligently man- had separately incorporated its parishes while pre- aged. In his view, church administrators did not take serving the corporation sole for the operation of the sufficient advantage of the various legal devices and archdiocese itself. structures already available to provide discipline and More recent antecedents to this discussion are found guidance for corporate activities and direction for the in the years immediately after the 2002 liability crisis work of trustees. In his view, if the church failed to in the church in the United States. The issue is not make adequate rules to direct the operation of real prop- whether a parish is liable for failing to supervise some erty and the maintenance of donations and gifts, the errant priest. In my view, the parish cannot be because, under the polity of the Catholic church, only the bish- diocese, etc., "we" were not always careful about doc- op can supervise a priest. The issue, rather, is quite like umenting these understandings. In the absence of clear the problem presented by St. Rose of Lima's fire. This documentation, "we" risked the possibility that some time the issue was whether some judgment creditor of court would misread our intentions and find parish the diocese, finding insufficient assets in the diocese to property subject to execution at the behest of the cred- satisfy its claims, might then turn its sights on parishes. itors of the diocese. That risk became a reality when This issue was presented rather dramatically in those bankruptcy courts in two of those proceedings rejected places where dioceses filed for the protection of the the statutory, canonical, and constitutional arguments bankruptcy courts' from their potential creditors. In of the dioceses and the parishes and ruled that parish those cases, most of which were filed by dioceses or- property was technically part of the diocesan bank- ganized as corporations sole, no separate civil structure ruptcy estate. Plainly, "we" needed to take a hard look was described for the'parishes. Rather it was always at what we are doing. understood that the parishes had autonomy guaranteed under canon law and were functioning as trusts or The Way Out unincorporated a,&ciations under the daily admin- The place to begin is from our ecclesiology. The struc- istration of not the line control of the bishop. ture of our communion is diocesan, not congregation- In the bankruptcies, however, the creditors went look- al or parish-based. That the Catholic church is a ing for sufficient ecclesiastical property to satisfy their po- hierarchy is beyond dispute. But hierarchy does not tentially many millions of dollars in claims. They found mean "monolith." The church operates on the principle the parishes to be the source of that property. of subsidiarity, with respect for the rights and obliga- tions of its constituent parts. Parish Assets Under the church's law, parishes are portions of dio- i In point of fact, in the territory of the diocese, most of ceses. Although the parishes themselves are public ju- the assets, real estate and cash, are assets of parishes, not ridic persons and referred to as nontollegial aggregates of the diocese. Some estimates show that upward of 90 of persons, the parishioners in the aggregate do not percent of cash collected by offertory collections in a have collective rights because of their status as "parish- parish stays in the parish, to operate its physical plant, ioners" in the church. Rather, under canon law, the ju- pay the staff, provide education and outreach in the ridic entities, parishes, have rights. I contrast to Protestant communions, and a partic- community, and serve the poor. While internally "we" In 1 all understood that parish operations were separate ular challenge to the church during its formative years I from the diocese, that the cash collected belonged in a in the United States, rights in the Catholic church de- real sense to the parish, that the real estate on which scend, and parishes have rights because they are part of the parish operated was really a trust obligation of the the universal communion. Rights do not ascend from the people, and governance does not rest Courts should defer to canon law. While the on the will of the people. A congregation- above statement on the First Amend- al model, therefore, is foreign to the must ment is correct, the applications have

church's ecclesiology. Thus, when con- always fallen a little shirt. In the Unit- ' I ' understand structing entitieswithin the church's com- ed States,churchesdo have the right to munion, care must be taken to avoid that pick a structure, and the courts cannot vesting rights in organizations or people pick a differentone for the church.The contrary to the church's self-identity.More parishes issue is-where is that expressed? In a important than avoiding a "rights com- charter?In canonical statutes?Civil by- petition" between a parish and its parish- are laws or articlesof association? Where? ioners, a structure for a parish must find autonomous Depending on a set of default consti- expression within the context of the dio- tutional rules to save church organiza- cese and avoid creating competing insti- agencies tions from liability consequences is not tutional religious rights between the parish prudent in my view. and the diocese.It must describe an enti- in Over the last thirty years, the courts ty within the fabric of the church that is have eroded the traditional deference autonomous in its daily affairsbut neces- the church that had been given to religious organ- sarily bound within that fabric on ques- izations, their structures, and their op- tions of identity, integrity, and and should erational independence with respect to indissolubility.And ikmust be so clear that defer their internal affairs. So, whether courts even civil judges can understand the struc- actually understand the autonomy of ture and properly define and protect it if to Canon law parishes under church law, courts will there is a resort to the courts. now more routinely rely on an exami- nation of the civil documents that de- Structural Questions scribe the nature of the parish. Even if the courts read It followsfrom all of t.geabove that the precise civil at- church law, the courts are enjoined to do so in secular tributes of the pari6h will be those of whatever civil terms and to avoid deciding religious questions. Al- structure is choqtjn for it. If no specificcivil structure is though I see an important distinctionbetween inter- chosen, the courts will apply certain default rules, like- preting church law and applying it in a descriptive sense, ly looking at parishes as activities of the diocese or per- the best advice in today's world is that if one wants haps an expression of a trust relationship or even an canon law on structure and governance to be respect- unincorporated association. But the problem persists ed by the secular courts, canon law should be proper- that, without a clear expression of the civil structure, ly expressed in the civil documents. the courts will be left to figure this out on their own. In my view, the civil law form should follow from the That is why it is so important to answer the structural canon law substance. In canon law, the parish is a pub- question for ourselves, so the courts won't do it for us. lic juridic entity. In other words, it has an ecclesiasti- But it is also argued that the secular law must re- cal identity separate from all of the other public juridic spect canon law on structure and governance. More- persons in the church. Under the civil law, therefore, over, the First Amendment guarantees that churches care must be given to describe the parish as a unique may structure themselves according to their own in- civil entity. temal doctrine and law, and such structural decisions are no legitimate business of the state.Thus, even with- Separate Entities out specifying a structure, courts must understand that In some places, parishes have historically been organ- parishes are autonomous agencies in the church and ized as separate civil corporations. The governance of

I I Summer 2009 CHURCH9 the corporation is in the hands of its own board, and At the same time, one must also -.pay attention to the the bishop, the pastor, another diocesan official, and non-real property-the cash collected and deposited usually two elected lay parish representativesserve as by parishes. Many dioceses have come to address the its members. Certain key decisions, such as appoint- maintenance of parish excess cash "invested" in tradi- ments, alienations, and &endments, require the bishop's tional diocesan savingsand loan pools. They have tried approval. This form of organization is similar to what to formalize the relationship to be sure that each parish's has existed in New York State, which was highly praised deposits are properly credited and followed and that the in a 1911letter from the Apostolic See to the American accounts are attributed to the parishes and not to the bishops. The bishops were enjoined to seek such a cor- diocese. Certainly if proper formalities are followed, porate model in their state civil statutes. Only until such the only entity that can reach such funds is the indi- a corporate statutory reform could be assured were the vidual parish and only its funds. A parish's funds could bishops- permitted- to use the cor- stillbe subject to its creditors, but not, ' poration sole form of organization. if done prbperly, to the diocese's or That advicewas offered a hundred to any other parish's. As is the case years ago. The corporation sole is with parish real estate, in this area, still the dominant form of organi- some new forms are beginning to zation for dioceses in the United emerge. A regional deposit and loan States. pool might, for example, facilitate a Yet new forms are emerging. more secure form of deposit (outside Some dioceses have decided to re- the operationalframework of the dio- structureparishes as express trusts. cese), which could also allow parish- This form allows the pastor to serve es in many places to leverage their as the trust administratorand gives capital strength to benefit others. Tra- separate civil character to the ditional loan pools limit their activity parish while, at the same time, it to the territory of the diocese. There clearly denotes the long-standing is no reason why a properly struc- supposition that dioceses held tured investment and loan entity parish property ih trust for the could not extend security and mission parish. In many places such forms beyond those limits. Although most- could be understood more as a re- ly in design- at this writing,- such an statement than a restructuring.Other places have begun operational approach could bolster the integrity of to experiment with different kinds of corporateforms, parish funds. including making the parish itself a corporation sole, where the 1vastor is the sole member. There is also at- A Last Word tentionbeing given to placing parish real estate in some Whatever these other structures and designs have to form of regional real estate holding corporation or trust. offer with respect to unique juridic identity and eccle- Whether the parish continues to operate as an activ- sial integrity, it must also be said that whatever struc- ity of the diocese or is made a corporation or trust, the ture is adopted must be indissoluble. After all, we are parish real estate is leased back to the parish from the one church. The unstated benefit of the dominant cor- trust entity. Although each of these models is slightly dif- poration solesystem is that it is aystal clear that all of the ferent, all have as their root the idea of givingthe parish parishes within a particular territoryare related to the die a separateidentity in the civil law as it has in canon law. cese. This new exercise has decision-makers asking In the sameway, whatever structuresare shaped for whether that traditional system provided the requisite parishes must maintain religious integrity. In our poli- identity and canonical integrity.If so, perhaps no radical ty, the ordinary administrationof the affairs of the parish structuralchangesarewarranted in a particular diocese. is in the hands of the pastor and his advisers. Certain It may be that the current civil structureneeds only minor extraordinary matters are reserved for the bishop: debt- adjustments rather than major reconstruction. The im- financed construction over certain thresholds, alien- portant matter is that these questions are being asked ation, -property,- and similar serious matters. It is said and should continue to be asked in diocesesaround the that parishes have dominium over the temporal goods. country.Our hope for the future consistsin getting these This is not the same thing as ownershipin the civil sense, questions asked and answered as thoroughly, precise- but it does connote a sense of control and direction. ly, and correctly as possible. 0

10 CHURCHSummer 2009